Spotify’s net losses in 2013 hit €58 million, according to new figures from holding company Spotify Technology S.A.
There was better news when it came to revenue, which rose 74% year-on-on-year in 2013, to €746.9m (£593 million).
Operating losses widened by 16.4% to €93m (£73.6m). In 2012, operating losses stood at €80m (£63.3m).
Net losses in 2013 were €57.81 million.
And in extra bad news for the company, its 2012 net loss figure – previously announced at €59 million – had to be restated. 2012’s net loss figure now officially stands at €86.7 million.
Subscriptions generated €678.7m in 2013, up 81.8% year-on-year.
Advertising revenue was just €68m.That means almost 90% of Spotify’s revenue is derived from Premium subscribers.
Spotify paid €605m in royalty and distribution costs last year, accounting for more than 80% of its revenues.
Sales and marketing costs were €111m, with €73m spent on Research & Development.
In a letter to investors, the company said: “We believe that music has mass market appeal – and as such, we believe we are just at the beginning of a much larger market opportunity. We believe our model supports profitability at scale.
“We have already proven that we’ve created real value for our users, and we know that the more time people spend with our product, the more likely they are to become paying subscribers. We believe that we will generate substantial revenues as our reach expands, and that, at scale, our margins will improve.”Music Business Worldwide